A Company Is Expected to Generate $175,000 in Earnings Next

question 24

Multiple Choice

A company is expected to generate $175,000 in earnings next period and requires a 20% return on equity capital.Using the assumptions of the price-earnings ratio,what would be the company's value at the beginning of next period?

• A) $781,250
• B) $1,250,000
• C) $2,000,000
• D) $875,000

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Definitions:

Issues Management

The systematic process by which an organization identifies, assesses, and responds to issues that could potentially impact its reputation or operational success.

Emotional Intelligence

The ability to recognize, understand, and manage one's own emotions and those of others, enhancing interpersonal communication and relationships.

Reputation Doctor

A professional or service specializing in managing and repairing the public image or reputation of individuals, companies, or organizations.

Issues Management

The process of identifying, assessing, and responding to potential issues or risks that could impact an organization, in order to mitigate negative effects.